Daily Deduction

"Time, time, time, is on my side... Yes, it is."

TPC crunches the numbers on Jeb Bush’s tax plan: A pricey gift for the wealthy.TPC’s analysis finds the former Florida governor would cut taxes at all income levels. But as TPC’s Howard Gleckman explains, “The plan would boost deficits by $6.8 trillion between 2016 and 2026 and overwhelmingly benefit the highest income taxpayers.”

TPC analyses of presidential candidates’ tax plans: Worth the wait. TPC’s Pozen Director Len Burman explains the why, how, and when of analyzing proposals. It’s not easy, especially given the limited detail from many candidates and the necessary levels of internal and external review. “Like making good wine, the process takes time—sometimes even more than we would like,” Burman concludes. But with eleven months till Election Day, “it is most important that we get our analysis right.”

Candidate Ben Carson would repeal it, but how might we reform the mortgage interest deduction? Right now, a taxpayer can deduct interest on up to $1 million in debt for home purchases and up to $100,000 on home equity loans. TPC researchers Chenxi Lu, Joseph Rosenberg, and Eric Toder consider three ways to restructure the deduction: Replace it with a 15 percent nonrefundable credit, lower the ceiling on eligible debt to $500,000, or combine a credit with a lower ceiling.

It’s not the size of the law that matters, but its explanations, regulations, and legal decisions. Marketplace asked TPC’s Gene Steuerle to explain that the “tax code” isn’t simply the set of laws passed by Congress: “Sometimes the law is a very simple statement… It might be two sentences defining some very complex area of the law… You’re going to have a huge number of words trying to define exactly what that means.”

On the Hill, tax extender talks stretch to the limit.Republicans won't support an indexed Child Tax Credit (CTC) in the tax extender package. Democrats demand it, but Senate Finance Committee Chairman Orrin Hatch said, “That's a nonstarter. We cannot do that. In a bill this large, you just can't do it.” Meanwhile, House Ways & Means Chairman Kevin Brady has a back-up plan: Renew the expired tax breaks for two years. Hatch called it “the first move.” Deal or no deal before Congress quits for the year? Depends on who you ask.

As for a government shutdown… House leaders on both sides of the aisle don’t see a compromise over spending any time soon. That means another short-term funding measure looks more likely to avoid a shutdown on Friday.

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